Filed 4/ 1/15 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

ANGELA BRITTON et al.,
Plaintiffs and Appellants,

v.
THOMAS V. GIRARDI et al.,
Defendants and Respondents. B249232
(Los Angeles County Super. Ct. No. BC492978)

APPEAL from a judgment of the Superior Court of Los Angeles County , Debre Katz Weintraub, Judge. Affirmed.
The Dion

- Kindem Law Firm and Peter R. Dion

- Kindem for Plaintiffs and Appella nts. The Erhlich Law Firm and Jef f rey Isaac Erhlich for Defendants and Respondents
William M. Shernoff, Michael J. Bidart , and Shernoff Bidart Echeverria Bentley.
Girardi | Keese, Thomas V. Girardi and Graham B. Lippsmith for Defendants and Respondents T homas V. Girardi and Gi r ardi | Keese. Engstrom, Lipscomb & Lack, Robert J. Wolfe and Robert T. Bryson f or Defendants and Respondents Jerry A. Ramsey, Walter J. Lack, and Engstrom, Lipscomb
& Lack.

——————————2

Plaintiffs Angela Britton and others appeal ju dgment after the trial court sustained
the demurrer of defendant s to plaintiffs ’ s econd a mended c omplaint (SAC) for damages based upon defendants ’ alleged failure to obtain their informed consent to an aggregate settlement, and defendants’ misappropriation of and failure to account for the settlement
funds . Plaintiffs were represented by defendant law firms and attorneys in connection with an action against State Farm Insurance Company arising out of the 1994 Northridge earthquake (State Farm litigation)

. Court

- appointed r etired judge s presided over a 1997 aggregate settlement of the matter on behalf of the plaintiffs

. However, i n 2012, one of the parties to the State Farm settlement conducted a random sampling of other plaintiffs ’ awards in the action, w hich sampling they contend revealed that the defendant law firms allegedly had not properly disbursed or accounted for the settlement funds and had concealed this conduct from plaintiffs. The trial court sustained defendants ’ demurrers on the grounds that plaintiffs ’ claims were based on speculation and barred by the statute of
limitations of section s 340.6 and 338, subdivision (d)

. 1 On appeal, relying on our opinion in Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105 ( Prakashpalan ) , a related matter also arising out of the Northridge earthquake, plaintiffs asser t the statute of limitations had not run under
Probate Code section 16460 because they had no notice of any wrongdoing. Further, they

argue defendants ’ violations of Business and Professions Code section 6 0 91 in failing to provide an accounting are not barred under that statute because their action was filed within one year of defendants’ failure to comply with the statute

. In Prakashpalan , supra , 223 Cal.App.4th 1105 , we held that absent any other notice, the statute of limitations pursuant to Probate Code section 16460 was tolled as to a client’s fraud claim arising out of funds held in an attorney’s trust account until the client received an accounting. Nothing in Prakashpa lan altered the time

- worn principle that where there are facts sufficient to put one on inquiry notice, the fraud statute of

1 All statutory references herein are to the Code of Civil Procedure unless otherwise indicated.3

limitations starts running even when the defendant is a fiduciary. In the instant case,
unlike in Prakashpalan , plaintiffs’ allega tions in their complaint in combination with the exhibits attached to their complaint reveal facts that should have put plaintiffs on inquiry notice of their fraud claim against the defendant attorneys, thus starting the running of the
fraud statute of lim itations. Because plaintiffs filed their complaint after expiration of the fraud statute of limitations, the trial court properly sustained defen dants’ demurrers and
we affirm.
BACKGROUND
1. Prakashpal an v. Engstrom, Lipscomb & Lack
In Prakashpalan , sup ra , 223 Cal.App.4th 1105, we held that the provisions of Probate Code section 16460 applied to claims for fraud where the attorney

- fiduciary had failed to provide an accounting of an aggregate settlement. In Prakashpalan , t he Prakashpalans alleged that th e defendant law firm settled a lawsuit for 93 insureds of State Farm for claims arising out of the Northridge earthquake in November 1997, but
that th e plaintiffs did not learn until February 2012 that the defendant had failed to fully and properly distrib ute $22 million of the settlement funds. The Prakashpalans alleged that they first suspected fraud when they had randomly contacted 17 of the plaintiffs in the litigation, and conduct ed a mathematical analysis of the settlement and of the overall litigati on. Based on those discussions, plaintiffs alleged a significant portion of the
settlement funds had been withheld

. The Prakashpalans did not allege that the settlement

was presided over by retired judges, that they had signed a settlement agreement , or that
their informed consent to the settlement was not obtained

. ( Id . at pp. 1114

– 1115 .) The Prakashpalans sued the Engstrom firm and two of its attorneys on numerous
theories. 2 In Prakashpalan , supra , 223 Cal.App.4th 1105 , we held that their fraud

- based

2 The second amended comp laint alleged claims for (1) professional negligence/legal malpractice/conflict of interest; (2) breach of fiduciary duty; (3) fraudulent concealment of conflict of interest; (4) fraudulent concealment of embezzlement; (5) intentional fraud; (6) constructi ve fraud; (7) unjust enrichment; (8) two claims of unfair4

claims (those claims not covered by section 340.6) were timely under Probate Code
section 1646 0, which governs fiduciaries, and that until the Prakashpalans received an accounting that put them on notice that monies may have been wrongfully withheld, thei r claims did not accrue. As a result, the complaint filed in February 2012 was timely although the action had originally been settled in 1997 because the Prakashpalans alleged that they had not received any accounting. On that basis, we also found their claims were
not barred as speculative because without the accounting, the Prakashpalans had no way of ascertaining whether funds had been improperly accounted for or withheld. ( Id. at
pp. 1124

– 1127 .)
2. The Britton Action
Plaintiffs commenced this actio n on September 28, 2012 against the firms and attorneys involved in the settlement of the Northridge e arthquake action: Shernoff Bidart Echeverria Bentley and attorneys William M. Shernoff and Michael J. Bidart (collectively Shernoff); Girardi | Keese and attorney Thomas V. Girardi (collectively Girardi) and Engstrom, Lipscomb & Lack and attorneys Jerry A. Ramsey and Walter J. Lack (collectively Engstrom)

. Plaintiffs alleged that each of the defendants and their law firms represented plaintiffs in connect ion with an action filed against State Farm Insurance Company arising out of the 1994 Northridge earthquake. In 1997, defendants settled the
State Farm l itigation on behalf of plaintiffs for a sum that plaintiffs allege was in excess of $100 million. Pla intiffs’ SAC alleged a claim for “breach of fiduciary duty” based upon defendants’ alleged concealment of their failure to account, failur e to obtain plaintiffs’ informed consent to the settlement, and concealment of their misappropriation
of settlement fu nds. Plaintiffs sought damages and equitable relief, including restitution and an accounting.
In addition , plaintiffs allege that in violation of r ule 3

- 310(D) of the Rules of Professional Conduct, defendants failed to obtain their informed consent to th e
business practices ; (9) conversion; (10 ) civil conspiracy to commit intentional fraud; (11 ) civil conspiracy to commit conversion; and (12) accounting.5

settlement. Plaintiffs alleged that “ some of the Defendants have claimed that the amounts allocated to the various plaintiffs participating in the settlement of the State Farm
l itigation were determined by a retired judge who had been appointed as a ref eree to make such allocations. For this reason, among others, the gross amount of the allocations made to all of the plaintiffs participating in such settlement is not privileged or confidential as
to Plaintiffs. ” Nonetheless , defendants failed to inform plaintiffs how the settlement was calculated, the total amount of the settlement being paid, and how the settlement would be distributed to each plaintiff. Defendants failed to provide a copy of the entire settlement agreement to plaintiffs, and had each plaintiff sign a signature page. Further, defendants concealed from plaintiffs their violation of r ule 3

- 310(D). Plaintiffs alleged that defendants provided them with “ net ” settlement checks and did not provide a complete and accurate accounting of all funds received and disbursements made from the settlement proceedings, a violation of Business and Professions Code section 6091. However, as alleged in their SAC, plaintiffs attached to their SAC as e xhibit 5 a document purporting to be a page from a Nov ember 3, 1997 letter to the Prakashpalans ( e xhibit 5) stating that Judge Peter Smith 3 had made the allocation determinations, the attorneys could not distribute the settlement until the plaintiffs signed a signature page to be appended to the “Master Settl ement Agreement,” ( an agreement plaintiffs claim they
never received ), by signing the agreement plaintiffs agreed to the terms of the settlement, after signing the agreement plaintiffs would no longer have any claims against State Farm, and the settlement was confidential and coul d not be discussed with anyone.
Exhibit 5 also stated that “[b]y signing the enclosed signature page, you agree to the terms
of the Settlement in your case against State Farm

. . . for claims arising from the Northridge e arthquake

. . . . Your signature also confirms that you accept the award and agree to have the signature page attached to the Maste r Release.”

3 As discussed below, Judge Smith was one of the two retired judges who presided over the settlement allocation pursuant to a reference order.6

Plaintiffs alleged that defendants deducted their one

- third fee and costs from the proceeds. O ut of the approximately $ 67.7 million (two

- thirds of $100 million) remaining after defendants deducted their fees and costs, p laintiffs assert that $18.3 million was paid to some of the participating plaintiffs from the settlement proceeds out of the $67.7
million that was availab le for distribution to plaintiffs . As a result, $48 million of the settlement proceeds have not been accounted for.
The SAC at p aragraphs 39 through 47 contain all egations of delayed discovery. Plaintiffs claimed they did not discover defendants ’ wrongd oing until February 12, 2012, within a year of filing of the action. Two of the plaintiffs , Ron Prakashpalan and Nava Prakashpalan , on February 14, 2012, se nt a letter to 12 randomly selected plaintiffs in the State Farm litigation . On February 18, 2012, the Prakashpalans sent another letter to 12
different random plaintiffs , and on February 23, 2012, sent another letter to 12 randomly
selected State Farm litigation plaintiffs. The February 18, 2012 letter stated that “ we were offered around $70,000 for each family as a settlement amount.

. . . For those who did not like the $70,000 [they] received [an] additional $70,000 or [an] additional $140,000. ” Based upon these figures, the 93 plaintiff families received $19.5 million, and over $80 million was un accounted for. Plaintiffs further alleged that n one of the State Farm litigation plaintiffs who contacted the Prakashpalans actually suspected any wrongdoing by the attorney defendants; the individual defendants were concerned that they could get into tro uble if they discussed the sett lement. On March 31, 2012, the Prakashpalans and Bob Premble, one of the State Farm litigation plaintiffs, organized a meeting during which Premble made a presentation explaining how the Engstrom defendants had committed wro ngful acts and that a simple mathematical analysis based upon 18 percent of the plaintiffs
demonstrated that there was over $22 million of settlement funds not accounted for. Meetings were held in May and August 2012 with other State Farm litigation plain tiffs.7

On September 17, 2012, plaintiffs ’ counsel sent a letter to defendants requesting a complete accounting of the settlement proceeds pursuant to Business and Professions
Code section 60 9 1, but defendants failed to respond to this request.
Plaintiffs alleged that defendants were untruthful when defendants told the plaintiffs (including the plaintiffs herein) that the plaintiffs had receive d their proper share of the settlement proceeds. Plaintiffs herein did not know defendants had violated
their dut ies under Rule s of Professional Conduct , r ule 3

- 310(D) or their duty to account to plaintiffs because they had no reason to distrust defendants

. The information regarding the calculation and disposition of the settlement proceeds was entirely within defen dants ’ knowledge, and defendants did not provide plaintiffs with any records or information and expressly told plaintiffs they were not to discuss the settlement with anyone. The Engstrom defendants and the Shernoff defendants have destroyed their files r elating to this matter, but did so without obtaining plaintiffs ’ cons ent before doing so.

3. Demurrers to the SAC The Engstrom defendants demurred. 4 They argued the claims based on the
settlement were time barred because plaintiffs failed to allege suf ficient facts to support the delayed discovery of their alleged fraud claims: they had not alleged with particular ity the representations alleged to be fraudulent, to whom the representations were made, or by whom they were made. Further, defendants argu ed plaintiffs did not allege why they did not discover the misrepresentations and concealment earlier with the exercise of due diligence; plaintiffs ’ claims were purely speculative; defendants owed no duty to provide an accounting because the R ules o f P rof essional C onduct did not place a

4 The Engstrom defendants were joined by the Shernoff defendants, who separately argued that plaintiffs failed to allege why they were prevented from discover ing the alleged fraud before the limitations period expired, and that plaintiffs’ misappropriation claims were based upon groundless speculation. The Engstrom defendants were also joined by the Girardi defendants, who separately argued the statute of limi tations was not tolled because plaintiffs had constructive notice of the purported injury more than 15 years before filing their action and plaintiffs’ claims were based upon speculation and they had failed to plead fraud with particularity.8

limitations period on the retaining of time records; and defendants could not mount an adequate defense without revealing confidential or privileged information under Solin v.
O ’ Melveny & Myers (2001) 89 Cal.App.4th 451

. F urther, Shernoff ’ s judicially noticed materials showed that the plaintiffs had requested the trial court to appoint special masters/referees to preside over the settlement

. The trial court entered an order providing for two retired s uperior c ourt j udges , Peter Smith and Arthur Baldonado, to act as special masters . The judges were engaged to allocate the settlement proceeds among the various plaintiffs pursuant to the retainer agreement entered into by the parties . Retired Judge Smith made the allocations , while Retired Judge Baldonado heard appeals from the allocations. 5 These facts relating to the settlement of the matter by retired judges in a special reference proceeding were not alleged in the Prakashpalan matter. In an order issued and filed by Los Angeles Superior Court Judge Harvey Schneider, t he special referees were appointed on October 14, 1998 and some three months after the special referees were appointed, plaintiffs voluntarily dismissed the matter on January 28, 1998. In opposition, plaint iffs argued that section 340.6 did not bar their claims because they did not discover their claim due to defendants ’ concealment and the statute was tolled until the fiduciary makes a proper accounting of client funds.
The trial court found the action was governed by section 340.6 as an action for breach of fiduciary duty, and that under 65 Butterfield v. Chicago T itle Ins

. Co

. (1999) 70 Cal.App.4th 1047, the plaintiffs ’ ignorance that the defendants ’ conduct constituted a violation of their fiduciary duty did not toll the statute of limitations because plaintiffs

5 Defendants j ointly have requested that we take judicial notice of those documents that Shernoff requested be judicially noticed in the trial court. Those documents are: (1) order granting plaintiffs’ ex parte application for appointment of special masters/referees p ursuant to sections 638 and 639, filed October 14, 1997 in the Northridge earthquake litigation; (2) the second amended complaint filed in Prakashpalan on April 30, 2012; and (3) the order of dismissal with prejudice filed September 4, 2012 of the Prakashp alan’s second amended complaint. We take judicial notice of these materials pursuant to Evidence Code sections 452, subd. (d)(1) and 459.9

had all t he facts to kno w that their consent had not been obtained when they were presented with their signature pages and checks , and had not receive d an accounting of
the settlement funds , and accordingly, the statute ran when they received their settlement
checks. The court noted that Bus iness and Prof essional Code section 6 0 91 gave them the right to demand an accounting at the time the settlement checks were received , citing People ex rel. v. Harris v. Sunset Car Wash , LLC (2012) 205 Cal.App.4th 1433

. Further,
the court found Rules of Professional Conduct, r ule 4

- 100(C) did not impose an obligation on the attorney to keep records for more than five years. Finally, plaintiffs
could have asked at the time of the settlement distribution for an accounting of the fees
and costs defendants deducted from the gross settlement amount. Thus, claims based upon the underpayment of settlement shares and excessive fees and costs required plaintiffs to exe rcise reasonable diligence and make a reasonable inquiry upon receiving
their settlement checks

. In the case of fraud, where a fiduciary duty exists, nondisclosure
is treated as fraud and a delayed discovery rule is more liberally applied, but such rule i s nonetheless subjected to a reasonable diligence standard. Even applying the three

- year
statute applicable to fraud claims ( § 338, subd

. (d)) , the statue would have begun to run no later than the date when the plaintiffs received their settlement checks.
DISCUSSION
Plaintiffs contend that the statute of limitations is not a bar to their action because
und er Pro bate Code section 16 460 , defendants never provided a written accounting of the settlement proceeds , which would have triggered the running of the statute , and thus the statute did not begin to run until they discovered defendants ’ wrongful conduct after the Prakashpalans conducted their mathematical analysis in 2012 and communicated that analysis to the State Farm litigation plaintiffs

. Further, th ey argue that the statute did not
run on their claim for defendants ’ violation of Business and Professions Code section
60 9 1 because defendants did not provide an accounting of their trust fund within the one

year period after plaintiffs ’ request therefor in September 17, 2012.10

Respondents respond that plaintiffs ’ claims are based upon mathematical conjecture and surmise . Further, under section 340.6, consistent with Prakashpalan , their
claims are barred by the one

- year and four

- year limitation period s ap plicable to claims for breach of fiduciary duty and plaintiffs have not alleged facts sufficient to toll the statute

. Further, even if plaintiffs had adequately pleaded fraud

- based claims within the scope of the holding of Prakashpalan (namely, the statut e of limitations of Probate Code section 16460 did not begin to run until plaintiffs had an accounting of the settlement proceeds) , they are barred by the limitations period of Probate Code section 16460 because plaintiffs were on inquiry notice more than one year before the filing of their action when plaintiffs allege that they cashed their settlement checks without receiving a copy of the agreement, without receiving prior informed consent, and without compliance with Rules of Professional Conduct, r ule 3

- 310(D) . Finally, plaintiffs ’ claims under B usiness and
P rofessions Code section 60 9 1 are barred because defendants had no obligation under
that r ule to maintain client rec ords for more than five years.
I. Standard o f Review On appeal from an order dism issing an action after the sustaining of a demurrer without leave to amend, we independently review the pleading to determine whether the facts alleged state a cause of action under any possible legal theory. ( McCall v. PacifiCare of Cal., Inc . (2001) 25 Cal.4th 412, 415.) “ We may also consider matters that have been judicially noticed. ” ( Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) We give the complaint a reasonable
inter pretation, “ treat[ing] the de murrer as admitting all material facts properly pleaded, ”
but do not “ assume the truth of contentions, deductions or conclusions of law. ” ( Aubry v.
Tri

- City Hospital Dist. (1992) 2 Cal.4th 962, 967; Evans v. City of Berkeley (2006) 38 Cal.4th 1, 20 [demur rer tests sufficiency of complaint based on facts included in the complaint, those subject to judicial notice and those conceded by plaintiffs].) We liberally construe the pleading “‘“ with a view to attaining substantial justice [ between ]11

the parties. ”’” ( Mendoza v. Continental Sales Co . (2006) 140 Cal.App.4th 1395, 1 401 ; § 452 .)
II. Statute o f Limitations Relying on Prakashpalan , supra , 223 Cal.App.4th 1105, p laintiffs argue that the statute of limitations in Probate Code section 16460 applies, and that the statute did not begin running until plaintiffs had knowledge of defendants ’ wrongful conduct

. T hey

argue plaintiffs could not reasonably have discovered defendants ’ wrongful conduct
because there were no facts t o put plaintiffs on notice of defendant s ’ concealment of their misappropriation of the settlement funds until the Prakashpalan’s did their mathematical analysis in 2012 . We disagree. In Prakashpalan , our opinion was based upon the lack of an accounting because no other facts were pleaded whic h would have established the plaintiffs there were on inquiry notice. Here, however, numerous facts were pleaded establishing inquiry notice and hence the triggering of the statute of limitations.
A. The Statute of Limitations Began to Run at the Time of Settlement Because Plaintiffs Have Pleaded Facts Showing They Were on Inquiry No tice of Any Alleged Misfeasance

1. Appli cable Statutes of Limitations
In Prakashpalan , supra , 223 Cal.App.4th 1105, we discussed the basic principles
of statutes of limitat ions regarding actions brought against attorneys. “‘An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff disco vers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first.’” (§ 340.6, subd. (a).) Section 340.6

state s two distinct and alternative limitation periods: One year after actual or constructive discovery, or four years after occurrence (the date of the wrongful act or omission), whichever occurs first. The statute applies to an action for malpractice as wel l as breach12

of fiduciary duty arising out of the performance of an attorney’s professional duties. ( Favila v. Katten Muchin Rosenman LLP (20 10) 188 Cal.App.4th 189, 223.) The statute is tolled only during the time the plaintiff has not sustained actual
i njury. (§ 340.6, subd. (a)(1).) Actual injury occurs where the plaintiff suffers any loss or injury legally cognizable as damages based on the asserted errors or omissions of an attorney. ( Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 743.) The fact of injury or damage need not be recognized or noticed by the plaintiff. Nor does the fact that damage may be difficult to calculate or prove prevent the legal malpractice statute of limitations from running. ( Croucier v. Chavos (2012) 207 Cal.App.4th 1138, 1148.) “Actual injury must be noticeable, but the language of the tolling provision does not require that it be noticed.” ( Foxborough v. Van Atta (1 994) 26 Cal.App.4th 217, 227.) Further, “[b]y its own terms, section 340.6 does not govern claims for fraud. Generally, courts have applied section 338, subdivision (d) to actions for fraud against attorneys. This statute of limitations for fraud is three years. (§ 338, subd. (d).) [Section 338] also codifies the delaye d discovery rule, providing that a cause of action for fraud ‘“is not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.”’ ( Brandon G. v. Gray (2003) 111 Cal.App.4th 29, 35; see § 338, subd. (d).) The date a complaining party learns, or at least is put on notice, that a representation was false is the date the statute starts running. (§ 338,
subd. (d).) ” ( Prakashpalan , supra , 223 Cal.App.4th at p. 1123 , fn. omitted. ) “With respect t o trust accounts, Probate Code section 16460 applies to a fiduciary’s duty to provide an accounting to a beneficiary and provides a three

- year limitations period that is triggered by the trustee’s accounting duty. A beneficiary of a
trust who receives an accounting that would put him or her on notice of a claim against the trustee has three years from the date of receipt of the accounting to file an action; if no accounting is provided, any action must be filed within three years of the discovery of the
cl aim. Under [this section], the duty of inquiry is triggered where there is sufficient13

information (either through an accounting or otherwise ) to put the beneficiary on notice to take action. (Prob. Code, § 16460, subd. (a); Nogle v. Bank of America (1999 ) 70 Cal.App.4th 853, 861 , fn. 5 [a duty of inquiry exists even where the alleged wrongdoer is a fiduciary]. )” ( Prakashpalan , supra , 223 Cal.App.4th at p. 1123 , italics added .) The statute of limitations of section 338, subdivision (d) provides a limitat ions period for fraud of three years. (§ 338, subd. (d).) This section effectively codifies the delayed discovery rule in connection with actions for fraud, providing that a cause of action for fraud “‘is not to be deemed to have accrued until the discov ery, by the aggrieved party, of the facts constituting the fraud or mistake.’” ( Brandon G. v. Gray , supra , 111 Cal.App.4th at p. 35.) The “date a complaining party learns, or at least is put on notice, that a representation was false” is the date the sta tute starts running. ( Ibid. ) Where a fiduciary relationship exists, such as that between an attorney and a client, “delaying accrual of the statute [of limitations] ‘prevents the fiduciary from obtaining immunity for an initial breach of duty by a subseq uent breach of the obligation of disclosure.’” (

Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1597.) Thus, the discovery rule is applicable in situations where the plaintiff is unable to see or appreciate a breach has occurred. “Delayed accrual of a cause of action is viewed as particularly appropriate where the relationship between the parties is one of special trust such as that involving a fiduciary, confidential or privileged relationship.” ( Moreno v. Sanchez (2003) 106 Cal.App.4th 1 415, 1424.)
The fraudulent concealment doctrine will also toll the statute of limitations. “[T]he ground of relief is that the defendant, having by fraud or deceit concealed material facts and by misrepresentations hindered the plaintiff from bringing an action within the statutory period, is estopped from taking advantage of his own wrong.” ( Pashley v. Pacific Elec. Ry. Co

. (1944) 25 Cal.2d 226, 231.) ‘ To take advantage of this doctrine

‘“ the plaintiff must show

. . . the substantive elements of fraud

. . . and

. . . an excuse for late discovery of the facts.” ’ ( Snapp & Associates Ins. Services, Inc. v . Robertson (2002)
96 Cal.App.4th 884, 890 .)” ( Prakashpalan , supra , 223 Cal.App.4th at p. 1123 .)14 2. Plaintiffs Have Alleged Facts Putting Them on Inqu iry Notice As we read the SAC, Plaintiffs’ claims for “breach of fiduciary duty” are based upon three theories of concealment : 6 (1) plaintiffs’ l ack of informed consent to the State Farm litigation settlement because plaintiffs were given only signature pages and the
nature of the settlement was concealed from them ; (2) defendants’ concealment of the salient settlement facts through defendant’s failure to render an accounting; and (3) defendants’ concealment of their alleged misappr opriation of settlement funds.
In Prakashpalan , the plaintiffs’ operative complaint did not allege numerous crucial facts present here that distinguish Prakashpalan and that lead us to conclude that,
unlike Prakashpalan , the facts demonstrate that plaintiffs here were on inquir y notice because the information given them about the settlement process warned them that they
did not have the information needed to give consent about the process and thus alerted them to investigate

. P laintiffs have alleged here that they had inadequat e information to make an informed consent to the aggregate settlement as required by r ule 3

- 310(D) of the Rules of
Professional Conduct because defendants concealed information from them under the guise of confidentiality and privilege concerning the total amount of the settlement, how much each plaintiff was getting, how much the attorneys would be paid, and the amount
of deducted costs. Plaintiffs claim this information could not be confidential because the amounts allocated to the various plaintiffs wer e determined by a retired judge appointed as a referee. Further, plaintiffs contend the defendant law firms failed to account for and allegedly misappropriated monies from the settlement proceeds (the alleged $100 million

6 We observe that in this case, like Prakashpalan , a claim for breach of fiduciary duty would be barred by the statut e of limitations of section 340.6. ( Prakashpalan , supra , 223 Cal.App.4th at p. 1122.) However, because we read plaintiffs’ claims as sounding in concealment (fraud), we apply the statutes of limitations of Probate Code section 16460 and section 338, subd ivision ( d ), which both have a three

- year period. ( Thomson v. Canyon (2011) 198 Cal.App.4th 594, 606

– 607 [to determine applicable statute of limitations, court looks to gravamen of complaint].)15

State Farm payout) , either throug h the taking of an excessive share for themselves as fees and costs, or by failing to distribute all of the settlement proceeds. Thus, plaintiffs allege their “net” settlement proceeds either did not reflect their retainer agreement, or the
amount the att orneys represented to them as their gross settlement (prior to deduction of fees and costs) was in fact less than the amount actually awarded to the m. Unlike Prakashpalan , the plaintiffs here have alleged facts showin g they were on inquiry notice given wh at they have alleged they did not know at the time they received
their settlement checks. W ith respect to their consent to the settlement, plaintiffs have alleged that at the time of the settlement, they received only a signature page and knew that they d id not receive a copy of the m aster s ettlement a greement, m aster r elease, and
confi d entiality agreement. P la intiffs attached to their SAC e xhibit 5, a copy of a page from a letter sent to the Prakashpalan regarding the settlement 7 in which plaintiffs wer e advised that by signing the mere signature page, they were giving up all claims against State Farm, past and future, and that they could not talk about the settlement with anyone.
Exhibit 5 also mentioned Judge Smith, who was not the s uperior c ourt judge assigned to their case, who would be making the settlement allocations. Judge Smith had been named as one of the settlement special masters/referees in the order requested by plaintiffs and filed by Judge Schneider on October 14, 1998

. Unlike Prakashpal an , supra , 223 Cal.App.4th 1105 , where the plaintiffs did not receive an accounting nor did they allege they had signed a settlement agreement and thus “had no other sources of information, were not put on notice of any wrongdoing until they
later conducte d an investigation by surveying other settling plaintiffs in the [State Farm litigation], ” ( id. at p. 1125) h ere, plaintiffs allege facts that required them to do more than wait almost 15 years to bring their claims against the defendant attorneys. Plaint iffs have not explained why they gave up all clai ms against State Farm, yet they knew upon signing

7 We infer that although the page from the letter attached as exhibit 5 was addressed to the Prakashpalans, because plaintiffs attached a page from this letter to the SAC , plaintiffs received a letter that was either identical or substantially similar.16

a mere signatur e page that they did not have the m aster s ettlement a greement, the m aster

r elease, or the confidentiality agreement, and were barred from spea king with each other
about the settlement based on a confidentiality agreement they knew they did not have ; further, they did not inquire about Judge Smith who was mak ing the settlement allocation, presumably including to the attorneys for fees and costs, which would have been the amounts left after allocations to the plaintiffs. With respect to the distribution of funds, unlike Prakashpalan , the plaintiffs here admitted that the settlement was presided over by retired judges who provided them with
an allo cation process and a review of that allocation. Judicially noticed materials reflect that the trial court entered an order appointing Judges Baldonado and Smith. Exhibit 5 to the SAC demonstrates that plaintiffs knew Judge Smith had made the allocations; the allocations could not be distributed until plaintiffs signed signature pages of a settlement agreement they knew they did not have ; and the settlement was confidential so that they could not discuss it with anyone. If the plaintiffs did not know abou t Judge Smith’s function, or about the allocation process described in the reference order, e xhibit 5 put them on notice to inquire who Judge Smith was and to inquire about the nature of the allocation process because they were told at the time of settleme nt that this allocation process foreclosed them from ever bringing claims against State Farm. Again, unlike Prakashpalan , sufficient facts were available to plaintiff to trigger their inquiry duty; the same analysis plaintiffs conducted in 2012 coul d have been conducted in 1997.
In Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, the Supreme Court rejected an argument that reliance on one’s attorney discharged a plaintiff from being on inquiry notice for purposes of the running of a fraud statute of limitati ons. In that case, the plaintiff wife sued her attorney, among others, alleging that the value of stock owned by the community was misrepresented to her when she entered into a marital property
distribution settlement. Her attorneys had made earlier inqu iries into the value of the stock when they questioned the stock’s valuation, but dropped their investigation. The wife argued that she had no duty to “make inquiry regarding the accuracy of the17

representations as to the value of the stock because [her at torney] had an obligation as a fiduciary to provide her with full and correct information as to their worth.” ( Id . at
pp. 874

– 875.) The Supreme Court observed that even if this were a correct statement of the law, “if she became aware of facts which woul d have make a reasonably prudent person suspicious , she had a duty to investigate further, and she was charged with knowledge of matters which would have been revealed by such an investigation. ” ( Id . at
p. 875.)
The same is true here. Thus, in conclusi on , the three

- year statutes of limitations of
Probate Code section 16460 and Code of Civil Procedure section 338, subdivision (d) began to run at the very latest when all avenues of recourse

— the special master proceedings, its internal appeal process, ques tioning of the process and its allocation

— expired, which was more than three years before the commencement of this action.
P laintiffs’ complaint filed in 2012 was untimely because the fraud statute of limitations started running at the latest in 1998, whe n plaintiffs were on inquiry notice (1) to investigate why they were being asked to accept a check about a settlement where they knew they had next to no information and (2) had access to a settlement allocati on process in which to object.
B

. Business and Professions Code Section 6091
Business and Professions Code section 6 0 91 provides that, “ If a client files a complaint with the State Bar alleging that his or her trust fund is being mishandled, the State Bar shall investigate and may require an audit if it determines that circumstances warrant. [¶] At the client ’ s written request, the attorney shall furnish the client with a complete statement of the funds received and disbursed and any charges upon the trust account, within 10 calendar days after rece ipt of the request. Such requests may not be made more often than once each 30 days unless a client files a complaint with the State
Bar and the State Bar determines that more statements are warranted. ” The attorney must preserve client records for at le ast five years after “ final appropriate distribution of18

(client) funds or properties. ” (Rule s of Prof. Conduct, r ule 4

- 100(B)(3) ; c f. ABA Model
Code DR 9

– 102(B) [ no time period specified for maintenance of records] .) In the context of an aggregate settle ment, Business and Professions Code section
6 0 91 does not specify to whom the accounting must be given

. P laintiffs argue here that all plaintiffs represented by a particular attorney are entitled to an accounting of all of that attorneys’ aggregate settle ment clients. S ome authority suggests that Business and
Professions Code section 6901 does not apply so broadly . ( See Rules of Prof. Conduct,
rule 4

- 100(B)(3) [client or client’s representative entitled to accounting]; Sternlieb v.
State Bar (1990) 52 Ca l.3d 317, 330 [accounting for entrusted funds must be provided to
client and any third party who has an interest in the funds or to whom attorney owes fiduciary duty].) However, we need not decide the issue here, as the plaintiffs admit they signed an agr eement knowing that they would not receive that information in connection
with the settlement. 8
DISPOSITION The judgment is affirmed. Respondents are to recover their costs on appeal.
CERTIFIED FOR PUBLICATION.

JOHNSON, J.

I c oncur:

BENDIX, J

. *

8 The applicability of Business and Professions Code section 609 1 to the State Farm settlement was not raised in Prakashpalan , supra , 223 Cal.App.4th 1105.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.Rothschild, P. J., concurring in the judgment:

I concur in the judgment only. I respectfully disagree with the majority’s conclusion that plaintiffs’ allegations show that, at the time of the settlement, plaintiffs already had sufficient notice of wr ongdoing to trigger a duty to investigate. But I believe that the judgment should be affirmed for largely the same reasons stated in my dissent in Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105. Defendants were plaintiffs’ lawyers, and all of plaintiffs’ claims arise from defendants’ performance of professional services for plaintiffs. Plaintiffs’ claims are consequently subject to the statute of limitations defined by subdivision (a) of Code of Civil Procedure section 340.6, which provides that “[a]n action against an attorney for

a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasona ble diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first.” The statute provides in addition that the four

- year period is
tolled whenever “[t]he attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney.” (Code Civ. Proc., § 340.6,
subd. (a)(3).) Plaintiffs filed suit more than 14 years after the (alleged) wrongful act or omis sion. Plaintiffs’ claims are therefore untimely unless plaintiffs have adequately alleged fraud or willful concealment. Consequently, in order for their claims to be timely, plaintiffs must allege with particularity all of the facts constituting the subs tantive elements of fraud. (See, e.g., Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) Plaintiffs have not done so. Plaintiffs purport to allege two fraud theories, but neither of them is adequately pleaded. First, plaintiffs allege that “[w]hen Defendants made settlement distributions to Plaintiffs, Defendants represented in writing to Plaintiffs that they were distributing the shares of the State Farm Litigation settlement to which they were entitled,” and plaintiffs2

allege that that re presentation was false. Those allegations are far too vague to constitute an adequate pleading of fraud. Plaintiffs never allege what defendants told them
about (1) the settlement, (2) their shares of the settlement, or (3) how those shares

were determin ed . In the absence of such allegations, it is impossible to determine
whether defendants’ alleged representations or omissions were materially misleading,

or misleading at all. We do not even know exactly what defendants’ alleged representations were. ( Cf. 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 718,
p. 134 [“The representation must be directly and specifically pleaded; without that pleading an essential element of the cause of action is lacking”]; id. , § 719, p. 135 [“The typical misrepresen tation of fact is usually pleaded verbatim”].) Second, plaintiffs allege that “Defendants did not obtain Plaintiffs’ informed written consent to the aggregate settlement,” because defendants allegedly did not
disclose certain information about the settlem ent. But plaintiffs again fail to allege
what defendants did tell them about the settlement, so they again fail to plead fraud with sufficient particularity. As long as plaintiffs fail to allege with particularity what they did know about the settlement, it is impossible to determine whether the things they did not know were of any significance. Plaintiffs also argue that their cause of action for violation of Business and
Professions Code section 6091 (which requires an attorney to provide an accounting
of client trust funds upon the client’s written request) is timely under Code of Civil
Procedure section 340.6, because the action was filed within one year of plaintiffs’ written request for an accounting. I am not persuaded. Plaintiffs concede that th ey first requested the accounting in 2012, more than 14 years after the 1997 settlement.
Plaintiffs further concede that under rule 4

- 100(B)(3) of the Rules of Professional Conduct, defendants were not required to keep the relevant records for more than f ive years after “final appropriate distribution” of the funds. The five

- year period for retention of relevant records presents a reasonable outer limit on the time within which a client is entitled to an accounting under Business and Professions Code sect ion 6091. Plaintiffs3

do not propose any alternative. Rather, plaintiffs appear to contend that an attorney is obligated in perpetuity to provide an accounting upon the client’s request, even if the relevant records were lawfully destroyed decades ago. That cannot be the law. Finally, I disagree with the majority’s description of the facts in two significant respects. First, the majority states that plaintiffs allege that when they executed signature pages for the settlement, “they did not have the Mas ter Settlement Agreement, the Master Release, or the confidentiality agreement.” (Maj. opn., ante , p. 16.) I can find no such allegation in the second amended complaint. The pleading does allege that “[d]efendants did not even provide a copy of the enti re settlement agreement to Plaintiffs” (italics added), but it does not say how much of the settlement agreement defendants did provide. If defendants gave plaintiffs part of the settlement agreement, then it is possible that the omitted parts were not ma terial and their omission was not misleading. Similarly,
the second amended complaint alleges that defendants “instructed [plaintiffs] to sign signature pages and return such pages to [defendants],” but it does not allege that the signature pages were the only part of the settlement agreement that plaintiffs were given. Again, all of the facts constituting the elements of fraud must be pleaded with particularity . ( Cansino v. Bank of America , supra , 224 Cal.App.4th at p. 1469.) Second, the majority state s that attached to the second amended complaint is
“a document purporting to be a November 3, 1997 letter to the Prakashpalans” concerning the settlement. (Maj. opn., ante , p. 5.) What is attached to the second amended complaint, however, purports to be only the fourth page of a letter of unspecified length. That page refers to “allocation determinations” made by “Judge Smith” and various other matters, including “the Master Settlement Agreement.” It is impossible to determine whether anything on that p age was fraudulent (as plaintiffs would have it) or suspicious (as the majority would have it) without seeing the rest of the letter. Again, the burden is on plaintiffs to plead fraud with particularity. The fourth page of that letter has no tendency, on its own, to show that they were defrauded.4

For all of the foregoing reasons, I concur in the judgment.

ROTHSCHILD, P. J.